Increasingly Constructive Rail End-Markets Support Volume Upside

Research evidence excerpt

Increasingly Constructive Rail End-Markets Support Volume Upside

May 12, 2026

Freight Monitor Weekly

Increasingly Constructive Rail End-Markets Support Transportation

Volume Upside

Fadi Chamoun, CFA Analyst

Improving demand trends across the majority of North American rail end markets reinforce fadi.chamoun@bmo.com (416) 359-6775

our conviction in an emerging volume recovery. With Q1/26 earnings season well under

Fred Kornachev Senior Associate

way and increasing conviction of a demand recovery having supported a valuation re-rating

fred.kornachev@bmo.com (437) 335-0049

across the North American rails (and to a greater extent, the broader transportation

universe), we examine trends across major customers of the Class 1 rails for proof points Amanda Abraham, CFA Senior Associate

that volume is inflecting in a way that underpins a more constructive outlook for rail amanda.abraham@bmo.com (416) 816-9139

volumes. For greater details on customer-specific trends refer to Exhibits 2-5.

Legal Entity: BMO Nesbitt Burns Inc.

 Steel fundamentals mixed, tariffs remain a headwind. Steel demand is firming,

benefiting from growth in data centers, energy, construction, and automotive end-

markets, supporting order books and rising backlogs. Utilization remains healthy, with Week 18 ended May 09, 2026

incremental production capacity coming on through 2027. That said, tariffs continue to

Carloads*

weigh on steel imports.

Week 4WMA QTD YTD

 Bifurcated coal market. Export coal markets are improving (benefiting from resilient y/y % y/y% y/y % y/y%

global steel production, elevated LNG prices, and policy-driven Asian demand), while Coal -5.6% -5.9% -3.7% 1.5%

domestic thermal coal remains weather dependent. Agriculture 9.1% 7.2% 7.4% 8.1%